AZERBAIJAN - March 12 - Turkey Buys Shah Deniz Gas.

On the first day of his visit to Ankara, Pres. Haidar Aliyev signs a contract with Turkey's state-owned pipeline company Botas for the supply of natural gas being developed in the offshore Shah Deniz field by a BP-led consortium (which also includes Statoil, LUKoil, SOCAR, TotalFinaElf, Iran's OIEC and Turkey's TPAO). A second agreement also signed in Ankara stipulates that the gas will be pumped to Turkey through a pipeline to be built in parallel to the proposed Baku-Ceyhan crude oil pipeline, a project which is yet to be finalised. The gas pipeline is to run from Baku to the Turkish border, through Georgia. The cost of building the new gas pipeline and upgrading an existing gas pipeline section is estimated at around $700-800m. (The deal represents a significant geo-political development as it reinforces the US-backed Baku-Ceyhan oil pipeline project opposed by Russia and Iran).